Crowdpac Helps Candidates Test the Waters
Company helped would-be challenger raise more than Chaffetz
Before Rep. Jason Chaffetz announced last month that he would not run for re-election, a virtually unknown challenger had already raised three times as much money as the Utah Republican.
Democrat Kathryn Allen, a suburban Salt Lake City physician who’d never run for office before, relied heavily on a company that specializes in political fundraising to rake in the cash.
Federal Election Commission records show that in the first quarter of 2017, 87 percent of her campaign contributions came through Crowdpac, a nonpartisan, for-profit company co-founded by a onetime adviser to former British Prime Minister David Cameron.
“I think we may have a lot still to learn about why Chaffetz decided to leave Congress, but certainly one factor was that he was going to have to actually put some effort into his re-election,” said Mason Harrison, a spokesman for Crowdpac.
Crowdpac also helped two Utah brothers start a billboard campaign that urged Chaffetz to investigate alleged ties between Russia and President Donald Trump’s campaign.
For people like Allen who are weighing runs for public office but may have little or no political experience, Crowdpac creates the political equivalent of a crowd-funding page. That’s used to raise money until the prospective candidate hits a target amount or officially announces.
Democrat Andrew Kim, who is considering a run against New Jersey Republican Rep. Tom MacArthur, said Crowdpac helped him raise $40,000 in less than a week.
“I haven’t done an actual live and aggressive fundraising push yet,” he said. “I’m really blown away from the response.”
Kim also said Crowdpac helped him learn some of the basics of campaigning, such as writing a statement requesting contributions.
“The next level up is being able to go through the motions of emails and
asking friends and family,” he said. “If I’m not comfortable not doing that with friends with family, maybe it’s not the thing for me.”
Crowdpac gets 8 percent of what it raises for a potential candidate, plus 30 cents on each credit card contribution. But donors aren’t charged unless the potential candidate decides to run.
“There is no processing fee or anything if a candidate doesn’t run,” Harrison said.
Once Crowdpac clients officially jump into a race, they receive all of the donations and their donors pay the credit card processing fees.
The California-based company does not take a percentage out of donations made on its website after a candidate announces, but it does accept tips from donors.
Candidates are still responsible for reporting donations to the FEC.
“As with all online fundraising platforms, reporting is always incumbent upon the campaigns themselves once contributions are processed,” Harrison said. “But when support is expressed as a pledge, there’s no actual contribution to report.”
The FEC has concluded in an advisory opinion that Crowdpac’s campaign contribution approach is permissible.